WICET's latest target for legal action
NEW Hope Corporation is the latest target for legal action by Wiggins Island Coal Export Terminal over the failure of a coal project.
The mining company, one of the five owners of WICET, shelved its Colton Coal Mine project which was contracted to deliver 500,000 tonnes a year of coking coal to the Gladstone terminal.
It became clear the future of the mine was in jeopardy in October when New Hope Corporation's two wholly-owned subsidiaries and owners of the project, Northern Energy Corporation Limited and Colton Coal Pty Ltd, went into voluntary administration.
The month before that the company told shareholders Colton had been canned and that the decision required a $132 million impairment of exploration costs and asset values.
Now the company could be exposed to more financial damage after WICET filed court action regarding a shortfall in coal throughput as a result of the mine's failure.
In the proceedings relating to the voluntary administration, WICET submitted that the debts of NEC and Colton are owned by New Hope, and should be repaid.
New Hope denies the claim, but estimates if it is upheld by the Federal Court, the company could be exposed to a potential liability of $130 million.
The Observer understands the next meeting over the dispute will not be this year.
The Maryborough project was granted critical mining leases by the State Government in May last year.
Company documents state the carrying value of the mine's assets have been impaired as a result of higher than expected charges to WICET.
The court challenge follows the long-awaited confirmation of a US$2.5 billion refinancing of the Wicet project.
After two years of negotiations, in September a NSW court approved the refinancing plan, which kicked the deadline of critical payments back until 2026.